Brands attract African consumers

03 April 2013

CAPE TOWN: Consumers in both rural and urban areas in Africa are typically highly engaged with brands, a trait that also unites wealthy shoppers and their less affluent counterparts.

Estimates regarding the size of the African middle class vary from 45m to 350m people, but panellists at Ernst & Young's Strategic Growth Forum in Cape Town felt that firms should not overly fixate on deciding exactly which earnings threshold defines this group.

Kofi Amegashie, head of Africa operations at Adcock Ingram, the pharmaceuticals firm, observed that the middle class is a highly-discerning group. "They actually like brands, and they want quality, and they are the same anywhere on the continent," he said.

He went on to argue that the "African consumer" could be someone wealthy, a member of the rising middle class or a rural customer. "There are different levels," he said, "and you must treat them differently to be able to capitalise on the opportunities."

As an example, he cited how FMCG business had developed new pack sizes and distribution strategies to reach low-income, rural consumers.

It was a point echoed by Martin Oduor-Otieno, the founder of Invest Africa. He said there was money flowing into poorer rural areas from the wealthy and the middle class, adding: "So there is money out there in the rural areas, it is just how you tap into it."

Mncane Mthunzi, executive director at South African supermarket chain Massmart, a unit of Walmart, built on this view, saying: "For us retailers we use disposable income.

"Do you have money that you can come to our stores and buy from our stores? [Whether] you got that money as a result of a grant, or your uncle has given you the money, or it is Africans in the diaspora posting the money to the continent, it really doesn't matter."

Mthunzi also rejected assumptions that people living in rural areas and townships only bought private label goods. "The opposite is actually true," he stated. "Consumers at the very low-end of the food chain, they aspire to be at the top-end, and they want to do exactly what people at the top-end do."

Sourced from How We Made It In Africa; additional content by Warc staff